Hospitals See Signs of Growth and Recovery
CHICAGO – January 9TH, 2024 – Hospital performance in November signaled ongoing stabilization and growth as operating margins continued to improve, according to the newest data from Kaufman Hall.
The latest National Hospital Flash Report finds that hospitals are beginning to recover from the long-term strain of the pandemic and subsequent economic challenges, though the gap between high and low performers remains quite wide.
Margin Improvement Promising, but Still Behind 2021 and 2020
Hospitals’ operating margins improved in November compared to the previous year, and other data points indicate movement toward recovery. The median calendar year-to-date operating margin index for hospitals was 2.0% in November 2023, as margins continue to trend positive.
Inpatient and outpatient revenue increased year-over-year by 5% and 9%, respectively. Total expense per adjusted discharge declined, while revenue per adjusted discharge increased—an indicator of financial recovery for hospitals.
Hospitals Look for Strategic Growth Opportunities
The average length of stay for patients in hospitals declined by 6% year-over-year, a sign that patient acuity—or the severity of illness—is returning to more normal levels. Organizations that have adopted value-based and bundled payment models will benefit further as they transition and provide care in the appropriate clinical setting.
“As performance indicators stabilize, hospitals should take advantage of the relative stability and re-embrace strategic growth if they hope to see continued success in 2024,” said Erik Swanson, senior vice president of Data and Analytics with Kaufman Hall. “Growth strategies may vary from hospital to hospital, but all leaders should ensure that they are supporting goals beyond just profitability and scale, including business model transformation and diversification.”
The National Hospital Flash Report draws on data from more than 1,300 hospitals from Syntellis Performance Solutions.
About Kaufman Hall
Kaufman Hall provides management consulting solutions to help society’s foundational institutions realize sustained success amid changing market conditions. Since 1985, Kaufman Hall has been a trusted advisor to boards and executive management teams, helping them incorporate proven methods, rigorous analytics, and industry-leading solutions into their strategic planning and financial management processes, with a focus on achieving their most challenging goals.
Kaufman Hall services use a rigorous, disciplined, and structured approach that is based on the principles of corporate finance. The breadth and integration of Kaufman Hall advisory services are unparalleled, encompassing strategy; financial and capital planning; performance improvement; treasury and capital markets management; mergers, acquisitions, partnerships, and joint ventures; and real estate.
Kaufman Hall companies include Claro Healthcare and Gist Healthcare.
CONTACT: Tyler Williams, TWilliams@MessagePartnersPR.com, 434-329-0940